Correlation Between Pacer Trendpilot and KraneShares
Can any of the company-specific risk be diversified away by investing in both Pacer Trendpilot and KraneShares at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Pacer Trendpilot and KraneShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacer Trendpilot 100 and KraneShares, you can compare the effects of market volatilities on Pacer Trendpilot and KraneShares and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Pacer Trendpilot with a short position of KraneShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer Trendpilot and KraneShares.
Diversification Opportunities for Pacer Trendpilot and KraneShares
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pacer and KraneShares is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Trendpilot 100 and KraneShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares and Pacer Trendpilot is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Pacer Trendpilot 100 are associated (or correlated) with KraneShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares has no effect on the direction of Pacer Trendpilot i.e., Pacer Trendpilot and KraneShares go up and down completely randomly.
Pair Corralation between Pacer Trendpilot and KraneShares
If you would invest 7,188 in Pacer Trendpilot 100 on November 1, 2024 and sell it today you would earn a total of 323.00 from holding Pacer Trendpilot 100 or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.67% |
| Values | Daily Returns |
Pacer Trendpilot 100 vs. KraneShares
Performance |
| Timeline |
| Pacer Trendpilot 100 |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| KraneShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Pacer Trendpilot and KraneShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacer Trendpilot and KraneShares
The main advantage of trading using opposite Pacer Trendpilot and KraneShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacer Trendpilot position performs unexpectedly, KraneShares can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in KraneShares will offset losses from the drop in KraneShares' long position.The idea behind Pacer Trendpilot 100 and KraneShares pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| KraneShares vs. iShares JP Morgan | KraneShares vs. First Trust Emerging | KraneShares vs. VanEck China Bond | KraneShares vs. WisdomTree Emerging Currency |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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